Yes-Secure savers withdraw their cash after rates are cut

Savers using a money exchange website have revolted and withdrawn their cash after rates were chopped.

Angry members of Yes-Secure have gone on ‘strike’ and refused to offer their money to borrowers because advertised rates are now too low to be worth the risk compared to the High Street.

Yes-Secure is one of a growing number of so-called peer-to-peer lenders. These let borrowers bypass the banks to take money from individual savers and investors instead.

No more: Yes-Secure members refused to offer their money to borrowers because advertised rates are now too low

Their popularity has exploded because they tend to offer savers better rates than on the High Street, and borrowers a cheaper deal, too. The riskier the borrower, the higher the rate savers should get for their money.

But Yes-Secure has effectively halved the maximum interest rates at which it will let savers lend their money — in some cases, cutting them from as much as 25 per cent to 13 per cent.

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On an internet forum about the cuts, one customer says: ‘We should start the lending strike from now and for as long as it takes.

‘If their new rates are not changed within seven days, I’ll withdraw 20 per cent every seven days from my account. I will use it to buy premium bonds or fixed-rate bonds and save the risk and hassle.’ Another said they had stopped because it was no longer viable after defaults and taxes.

Yes-Secure founder Chandra Patni, whose company has loaned more than £500,000, said it did not want to discourage savers. However, it was vital to impose the new rates ‘in a bid to target less risky customers’, he said.

Nearly £240million has been ‘lent’ using these websites over the past seven years, through firms including Zopa, Funding Circle and RateSetter.

The industry recently won support from Andrew Haldane, executive director for financial stability at the Bank of England.

‘In Britain, companies such as Zopa and Funding Circle are developing this model,’ he said. ‘At present, these companies are tiny. But so, a decade and a half ago, was Google.’